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Press Release
Four erosion control company owners or managers pleaded guilty to rigging bids and fixing prices as part of a conspiracy targeting a total of over $100 million in publicly funded transportation construction contracts across Oklahoma.
Stanley Mark Smith, a company owner, pleaded guilty today. Roy Henry Henrich, a former owner and officer of another company, pleaded guilty on Dec. 4, 2023. Ryan Ashley Sullivan, an owner and executive of a third company, pleaded guilty on Nov. 6, 2023. James Travis Feazel, a former operations manager of a fourth company, pleaded guilty on Sept. 26, 2023.
According to court documents filed in the U.S. District Court in Oklahoma City, Smith, Heinrich, Sullivan and Feazel conspired, along with others, to rig bids, fix prices and allocate contracts for erosion control products and services. Starting in 2017, Smith, Heinrich, Sullivan, Feazel and their co-conspirators agreed to raise prices and divvy up contracts across different areas of Oklahoma. As part of this criminal conspiracy, they often sent intentionally high-priced bids or outright refused to bid. Smith — whose company targeted over $42 million worth of contracts as part of the conspiracy — and Feazel — whose company targeted over $50 million worth of contracts — continued conspiring into April 2023. Heinrich — whose company targeted over $7 million worth of contracts — was part of the conspiracy until at least July 2021, and Sullivan was part of the conspiracy until at least April 2019.
“In Oklahoma and across the United States, Americans depend on transportation infrastructure as they travel to work, study, shop and visit family. Protecting fair and open competition for the public contracts that fund this infrastructure has never been more vital,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “These guilty pleas show that the Justice Department and its Procurement Collusion Strike Force partners are committed to investigating and prosecuting anyone who uses criminal schemes to target infrastructure contracts.”
“Protecting fair and open marketplace competition is essential to protect taxpayers and to ensure consumers can trust publicly funded contracts” said U.S. Attorney Robert J. Troester for the Western District of Oklahoma. “Corporate executives who conspire to rig bids and fix prices will be held accountable. I applaud the detailed work by the investigators and prosecutors in this case.”
“The Department of Transportation Office of Inspector General (DOT-OIG) is committed to ensuring that any activity related to price-fixing or bid-rigging involving federal taxpayer dollars for transportation projects in the State of Oklahoma, or elsewhere, is identified and thoroughly investigated,” said Special Agent in Charge Joseph Harris of DOT-OIG’s Southern Region. “Together with our law enforcement and prosecutorial colleagues, we will continue to use every tool at our disposal to hold these offenders accountable and restore equity to the bidding process.”
“Today’s announcement demonstrates the FBI’s ongoing work to eliminate bid rigging and price fixing, and to hold those conducting these activities accountable for their actions,” said Special Agent in Charge Edward J. Gray of the FBI Oklahoma City Field Office. “These criminal acts cheat American workers and consumers while harming competitive markets. The FBI is committed to continuing this important work alongside the Justice Department and our law enforcement partners.”
The defendants each pleaded guilty to a violation of Section 1 of the Sherman Act. They each face a maximum penalty of 10 years in prison and a $1 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A federal district court judge will determine any sentences after considering the U.S. Sentencing Guidelines and other statutory factors.
The DOT-OIG and FBI Oklahoma City Field Office investigated the case.
Trial Attorneys Bethany Lipman, Matthew Grisier and Marc Hedrich of the Antitrust Division’s Washington Criminal II Section and Assistant U.S. Attorney William Farrior for the Western District of Oklahoma are prosecuting the case.
Anyone with information about this investigation or other procurement fraud schemes should notify the Procurement Collusion Strike Force (PCSF) at www.justice.gov/atr/webform/pcsf-citizen-complaint. The Justice Department created the PCSF in November 2019. It is a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government – federal, state and local. For more information, visit www.justice.gov/procurement-collusion-strike-force.